‘It all disappeared with Brexit’: Craft beer boom ends as more than 100 UK firms go bust
More than a hundred breweries have shut in the past two years as new trade barriers were compounded by Covid and tax changes
Brexit crushing small business while leaving the larger businesses relatively unscathed was part of the plan all along, not just in regards to beer. The big players always knew they could deal with added fees and paperwork by passing on the cost to the consumer because they were already part of big pub chain and franchise monopolies.
Many pubs go though a hight turnover of landlords as they are all run as franchises now, with landlords forced to buy from the owning brewery while also paying rent to them, but with margins so thin and brewerys setting the prices they can't survive unless the place is always busy. So they quit and then in then another hopeful steps in to repeat the process. The brewery don't care, they still get thier money.
The Independent ones that were quick to react stopped selling to pubs and started selling to supermarkets where margins were better. Either that or they caved in and sold the brand.
Now the multinationals have successfully crushed craft beer, the threat to thier profits that was showing people you don't have to drink washed out larger that they keep putting a new name on every year to make it sound better.
The new tax rules coming out that penalize higher alcohol content is a further step towards the dominance of cheap, mass produced, piss water. More work being done by the conservatives on behalf of thier corporate paymasters.
Brexit crushing small business while leaving the larger businesses relatively unscathed was part of the plan all along
With so many Tory plans that go "wrong", as it always favours the rich one has to conclude that it's a feature not a bug.
Plus the paperwork for a shipment is largely the same regardless of how big it is. If you want to ship 50k worth of beer you have to hire the same lawyer to do the same stuff as the business that does multi million dollar shipments.
Brexit was obviously a plan brewed by the ultra wealthy of the UK. They all have money stashed on the Cayman Islands and the only way to onshore that money without heavy taxation was to get out of the EU and change the UK tax laws. Also no more pesky European Court of Human Rights
Yet I manage to get a decent craft ale everytime I go to the pub, these businesses haven't been crushed at all.
I was at a beer festival just a few weeks back and there were tons of brewers there seemingly fine.
New duty rules:
(1) it doesn't penalize still cider (which tends to be the typical craft ciders), with even a strong still craft cider usually being below 8.4% abv.
(2) plenty of craft beers <= 3.4% abv, e.g. milds, many bitters, and the highest rate doesn't kick in until 8.5%. Nice beers don't have to be strong.
Wait. So they opened an export-focussed company a year after the Brexit vote? I mean it sucks and all, for them, but it doesn’t sound too bright either.
I believe they thought it would be possible to leave the EU politically but keep all the economic advantages.
Like so many politicians told them.
Indeed I’m sure you’re right that that’s what they thought, but it’s still an enormous risk to take. In any business plan that should’ve been a red flag.
And if on faith they chose to waive that risk, well… that’s just not great entrepreneurship.
Yeah I noticed this. Why start a company that relies on export to EU countries when you’ll be out of the EU in a couple of years?
I’m sure that’s not the case for all the breweries going out of business, but that just seems like a recipe for failure from the start…
I agree with your premise but also, post-Brexit exports are still a thing. Sounds like some other stuff tipped them over the edge though, like grain & barley prices following the illegal invasion of Ukraine.
Someone said they were gonna secure better deals!
More small businesses fucked over. Whatever you say from an armchair about whether in hindsight it was wise for them to do this or not, I always find it hard to read stories where people have tried and failed to strike out in their own.
A lot of the time it's because people are lied to in capitalist countries that we should all aspire to striking out on our own, running our own businesses, being entrepreneurs blah blah blah.
Feel sad for them
This is the best summary I could come up with:
Kimi Karjalainen and his brother Marko poured their life savings into Bone Machine Brewing Co when it opened in Pocklington, East Yorkshire, in 2017 before moving to Hull, as part of the craft beer revolution that swept Britain.
Post-Brexit trading arrangements with European Union countries meant that Bone Machine’s craft beers needed to be accompanied by expensive and time-consuming paperwork.
Bone Machine is one of more than 100 small brewers that have been forced out of business in the past 18 months, hit by a combination of Brexit, the pandemic and the cost of living crisis and now threatened by changes to beer duty laws.
So while people were getting worse off, the multinational brewers were going to pubs, to free houses, and saying ‘we’ll give you cheap kegs, but we want control of all your lines’.”
Other issues affecting the industry have been the shortage of carbon dioxide following the early stages of the energy crisis, and Russia’s full-scale invasion of Ukraine which raised the cost of barley and hops.
Larger companies have been doing well, including Brewdog, the Camden Town Brewery and Beavertown, which the Grocer reported had seen supermarket sales rise by more than a quarter.
The original article contains 958 words, the summary contains 199 words. Saved 79%. I'm a bot and I'm open source!
People are focussing pretty heavily on the "Brexit" part despite the article going in to way more detail on other contributing factors. Throwing Brexit in the title line as if it is the sole reason was purely for effect here and to get you to click it.
That's a crazy number
I'm a bit skeptical of Brexit being significant here. Craft beer from small breweries generally isn't exported, and often it doesn't go that far from the area in which it's brewed.
All the other reasons listed (pandemic, cost of living crisis, tax rules etc) are plausible though.
“We were heavily geared for export. We’d be selling to Finland, Sweden, Norway, Ireland, Netherlands, Italy, Spain. We had Hungary in the pipeline. And it all disappeared with Brexit.”
Looks like it was meant for export here.
If Brexit contributed to a general economic downturn then luxury goods with cheaper and readily available substitute goods would be one of the first to be hit by people spending less.
But like you said, it's probably very hard to delineate the effects of Brexit from general economic malaise.
Yeah, brewing takes a fuck ton of energy and pubs were shut for a year because of covid.
But sure, it's brexit. Lol.
@bernieecclestoned @Mex @unitedkingdom Good point. Brexit probably didn’t help though.
Brexit presented a binary option, if you want to trade in the EU, you need a subsidiary in the EU.
This was obvious, and the tiny minority of UK companies that export to the EU, which is fewer then 10%, did exactly that.
If brexit affected the craft brewing industry, then their association failed to plan. They should have created a co-op and established a warehouse in the EU.
I export and import globally, it's just a few forms. It's been going on for centuries, it's not that hard.
Was there a worldwide issue of pubs/bars closing?
Because of a bunch of countries faced this problem, you can definitely blame COVID. But if it's fully isolated in the UK... well we'll now looks like it's the consequences of my own actions huh
“Energy bills are decimating our sector, with extortionate costs wiping out profits and closing pubs at a faster rate than the pandemic.”
in a 2022 survey of European accommodation professionals, the top three challenges faced across Europe were energy, costs, the overall economic situation, and acquiring and retaining staff
